Investors frequently cite rigid, slow, and cumbersome planning as an inhibitor to investment.

Trends of rapid population growth and urbanisation have ensured that many of the world’s cities are far from functionally optimal. The speed at which populations have moved into cities over the last fifty years or more has resulted in the haphazard growth of cities, with many lacking the design and innovation required to fulfil their potential as drivers of national economic growth.

Professor of Economics and Director of the Urban System Project at New York University’s Stern School of Business, Paul Romer, however, offers an innovative solution which could fundamentally alter the approach that cities take towards urban planning, the introduction of the charter city.

What is a charter city?

A charter city is a city which is governed by its own specific charter document, rather than by any state, provincial, regional or national laws. These charter cities would be founded in new Greenfield locations and the charter would govern all forms of social interaction. Essentially, by founding a new city, and not trying to implement radical solutions in existing cities, new residents would be required to agree with the points of the charter before they moved in, which would limit the risk of any potentially violent resistance.

In order to create these new cities, national governments would need to play one of three roles. The first could be that of a host; a government which has the required unoccupied land to host the new city. Secondly, a national government could act as a source, a country which supplies the new residents, albeit they move voluntarily of their own free-will. Thirdly, a government could act as a guarantor. In this instance, a national government must make a credible commitment that the new charter will be enforced and will have the force of law.

The inherent advantages of charter cities

Paul Romer likens the establishment of charter cities to start-up businesses. While fixing the problems with existing cities is an unenviable task fraught with problems, by contrast the creation of a charter city offers a clean slate from which to create a city which is intelligently designed and suited to modern living.

Romer claims that charter cities will not only attract the affluent and mobile, but also the working poor, who will be more able to find affordable housing, “because someone profits by offering it to them.” Romer’s proposed governors will ensure that the vision for the city is followed, while investors will have a long term vested interest in the effective design of the city as without its residents flourishing they will see no return.Romer stresses that the goal is not to create a utopian city, but to encourage innovation and competition, which ensures that the best cities flourish and others can learn and build on the progress made. This transference of best practice it is hoped will not just be between charter cities, but between charter cities and existing cities too.Criticisms

The main criticism levelled at Romer’s theory is the viability of such an undertaking in such a constrained investment environment. Even if long-term investors can be secured, and a suitable area of land can be acquired, the construction of a new city from scratch requires a huge commitment by all stakeholders to build the kind of modern infrastructure expected by new residents.

While Romer’s charter cities appear on the surface to be an ambitious proposition, governments in the developing world are already beginning to demonstrate an interest in the possibility. While there are many pieces of the puzzle to be put in the place, superficially charter cities certainly offer an answer to the question of how cities can better ensure that urban development takes place on their own terms.

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